US jobs numbers miss

Peter Spence is an independent researcher and writer. He is a former Online Writer at City A.M.

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Peter Spence

It's one of the most important economic releases out of the US in a long time.

This month's nonfarm payrolls number has the chance to settle a debate about the health of the US economy, and one that is important for policymakers and investors.

Is the recent underperformance in US economic data a question of some unusually bad weather, or is there something more fundamental at play?

If the problems are more than temporary, then that may steer the Federal Reserve's decisions when the Federal Open Market Committee meets on the 29-30 April.

A strong number signals that the weather was responsible, but too strong, and markets may be concerned about an interest rate hike by the central bank. Traders will want a Goldilocks number - not too hot, and not too cold.

This month's nonfarm payrolls has come in at 192,000 - a number lower than analysts had forecast. A poll of economists saw the headline number coming in at 200,000 in March.

A number above last month's 175,000 would have made this the third month of consecutive gains. That winning streak for nonfarm payrolls was last seen more than three years ago.

However, February's number has seen big upward revisions - to 197,000. Societe Generale's Kit Juckes calls the pace "consistent with steady but unspectacular growth".

John Hardy, head of FX Strategy at Saxo Bank, says the most interesting scenario could have been a number exceeding 250,000. Such a strong number could threaten pro-risk currencies "that are vulnerable to prospects for tighter liquidity" says Hardy.

Alternative analysts

Professionals managed to beat all of our amateurs this month.

A random group of five people - the family of interest rate strategist Steve Feiss - gave a consensus forecast of 220,000 jobs added. Feiss' five year old son had expected an incredibly strong number (372,000) in March.

Feline markets commentator Geoffrey Boycat did well in February, beating the human analysts by guessing nonfarm payrolls more closely than consensus forecasts. Sadly, this month Boycat refused to pick any number.